E-commerce B2B and B2C: 5 key differences
According to a projection by Forrester, the B2B e-commerce market should reach $1.2 trillion by 2021 in the United States. It even appears set to surpass the B2C market by the year 2025 (Frost & Sullivan).
This is a trend companies must consider, especially in the logistics and shipping industry. But how will it impact their processes and business? How can they integrate the differences into their work methods? Here are a few of the key differences between B2B and B2C customers, and a few ideas on how to take them into account!
B2B vs. B2C e-commerce: 5 major differences to consider
When developing your e-commerce business, remember to keep your targets in mind at all times. We have a tendency to think that B2B and B2C targets act in the same way, because the process is run by humans. However, they differ in many ways. Here’s an overview of the differences between B2B and B2C buyers:
- Decision-makers: 70% of B2B purchasing decisions involve at least two people and close to 30% of B2B transactions involve more than five people. This differs significantly from the B2C sector, where businesses are often dealing with only one person. Furthermore, in the B2B sector, the person doing the buying is not necessarily the end user. Businesses need to take these factors into consideration in many of their processes—their communications, e-commerce websites, transactional documents—so their processes need to be adjusted accordingly.
- Purchasing process: Individuals are more prone to impulse buying. Since they don’t need their purchases approved by several decision-makers, they can get away with more emotional decisions. On the flip side, B2B buyers take more time before making a purchase and focus on more factual criteria, like product and shipping costs, their relationship with the company, or the length of shipping time.
- Timelines: B2B orders are usually larger than B2C orders and must be planned ahead of time. At the same time, B2C buyers act more out of need or urgency. So a variety of factors will affect the buyer’s decision, such as speed of delivery, free shipping, or same-day delivery. B2B buyers, on the other hand, place greater importance on building a long-term relationship with their supplier in order to get discounts on regular orders, for example.
- The customer experience: The reason e-commerce is thriving today is that buyers, no matter the type, are making frequent purchases online. B2B buyers are no exception: 89% of B2B research is done online. That’s why companies have to improve the purchasing process on their e-commerce website and make the site easy to navigate. The customer experience must be quick, clear and intuitive. According to a report by research firm Gartner, 70% of e-commerce will move from B2C and B2B models to models that focus on the individual customer experience. Ultimately, they need to take their targets’ multichannel expectations into account because 42% of B2B buyers use mobile devices during their purchasing process.
- Personalization: Fifty percent of B2B buyers surveyed by Atradius identified improved personalization as being a key feature for suppliers they would want to work with. They expect to receive promotional offers that are relevant to their industry and needs. In building a long-term relationship, they also want personalized service. Price is also a factor: B2B buyers anticipate tailored prices and discounts, taking into account their purchase volume and frequency, and their loyalty. Based on a Gartner survey, by late 2018, 40% of B2B e-commerce sites will be using algorithms to optimize and personalize prices.
Digital tools to meet the needs of B2B targets
How can companies accommodate these specific B2B behaviours and needs?
One way would certainly be to use digital tools. For example, it’s very important for suppliers to use an e-commerce site, but that site must be integrated with their other software (e.g. software for inventory management or customer relationship management). Therefore, the company’s various systems must be highly interconnected to provide efficient, personalized service to its targets.
In the shipping industry, this can mean the use of mobile devices and digital transactional documents. Since customers use their phone to research, and even to make purchases, it would make no sense for other transactional documents to be based on a different logic and only be available in paper format. So it’s vital that the invoice, and even the proof of delivery (POD), be available in electronic format if the customer so chooses.
Digital POD: suppliers derive benefits too
It’s also a good practice for companies supplying goods and services to offer digital proof of delivery. It allows them to have access to field information in real time. That way they can be sure that the invoice matches the POD and that the information is accurate. By having digital PODs on a mobile device, for example, customers can sign directly and make corrections on the spot, if needed. It saves the company time, because there’s no need to wait for the delivery person to bring back the paper record to initiate the billing process. Last of all, it avoids errors and the loss of documents, as well as the ensuing disputes, because everything is recorded directly on the digital POD.
Do you think digital tools could help you communicate more effectively with your B2B targets? Yet you don’t want to change all your systems? Objectif Lune can help! Feel free to contact one of our advisors to learn more about our solutions!